Editorial

Single-payer cuts the middle men but at what cost?

Republicans made “Repeal and Replace” a catchy slogan for the right, but Democrats have one of their own.

Get ready to hear a lot of “Medicare for All,” the new rallying cry of those who think it’s time the United States adopts a single-payer health care system – or something like it.

Universal health coverage – the idea that every American should have access to affordable health care – is not particularly controversial as an idea. But the single-payer concept is.

“Single payer” refers to the concept of the federal government setting rates for medical services and reimbursing health care providers. It’s the backbone of many other countries’ national health plans, including those of the United Kingdom and Canada.

“Single payer has been around for a long time. It is not a new idea. It’s one way to easily provide universal coverage because it can be mandated,” says Dr. Jim Powers, professor of medicine at Vanderbilt University and chief of geriatrics at Vanderbilt University Medical Center.

But it’s in direct opposition to the American “multi-payer” system that consists of many insurance companies selling policies, negotiating rates and paying claims for medical services.

“We are the headquarters of capitalism, and there is nothing illegal about letting people pay for health care and making a profit on it,” Powers adds. “But as a physician who has seen people suffer, I think that works against health care as a human right.”

The Affordable Care Act contained many insurance industry reforms when it passed in 2010, including eliminating the right to deny coverage to people with pre-existing conditions or to base rates on health status.

But with 29 million Americans still uninsured, proponents of single-payer are trying to elevate it into the national consciousness.

“I truly do believe it is a human right at some level, but I don’t make that argument,” says Dr. Carol Paris, a Nashville-based retired psychiatrist who is president of Physicians for a National Health Program, a national organization with more than 21,000 members who are doctors, medical students and other health professionals.

“To me, health care is a common good, a public good. It is in my best interest for everyone in this country to have good health care, from a public health standpoint, but also to have all our tax dollars being used in the most efficient and effective way possible.

“One of our greatest resources is our people. When they’re healthy they can work, and when they’re healthy they can contribute. An educated population is a productive population. So is a healthy population.”

Paris has been involved in the single-payer movement since the mid-2000s after disillusioning experiences with the insurance industry while she was operating her own practice in Maryland.

Now she is an activist for the single-payer movement, gaining national attention by protesting in Congress and at political rallies, including Donald Trump’s rally in Nashville earlier this year.

“I’m the one who goes out and raises hell and gets arrested,” she explains, laughing. “I’m not inherently an agitator but there are some things that are just simply wrong, and for whatever reason this is the issue that has become my calling.

“What we are doing in this country is so wrong and so unnecessary,’’ she points out.

“We are wasting literally half a trillion dollars a year propping up a middleman – the insurance industry – and it contributes nothing to our health care. It contributes only to the profits of investors.”

U.S. Rep. John Conyers’ “Medicare for All Bill,” H.R. 676, now has 117 co-sponsors, including U.S. representatives Jim Cooper of Nashville and Steve Cohen of Memphis.

Vermont senator Bernie Sanders will soon introduce a companion bill in the Senate that will lay out more details of “Medicare for All,” including the scope of medical services covered, plans to incorporate hospitals and physicians into a national health plan, reimbursement rates and a budget to retrain the many administrators that handle the vast amount of paperwork of the private insurance industry.

When that happens, expect Sanders, who recently was named the most popular politician in America by a Fox News poll, to take his Medicare for All show on the road with the same passion and fury he displayed as a presidential candidate.

Sanders has also hinted he will introduce bills that might be easier to swallow, including the option to lower the age of Medicare eligibility from the current 65, or create a public health insurance agency that would compete with private insurance companies (the so-called “public option”) – something that was considered for the Affordable Care Act but did not make it into the final bill.

Nationally, about 53 percent of Americans support single-payer, according to a June poll from the Kaiser Family Foundation. That’s more than the 46 percent who supported it before the Affordable Care Act (aka Obamacare) was passed in 2010.

The number of Tennesseans who say they support the idea of guaranteed universal health coverage through a single government plan has risen slowly but steadily – from 16 percent in November 2016 to 22 percent in May 2017, according to the bi-annual Vanderbilt University Poll.

“There has not been much change … but some movement,” says John Geer, professor of political science and Vice Provost of Academic and Strategic Affairs at Vanderbilt.

Big impact on Nashville

Theoretically, a move to single-payer health care would have a significant impact on Nashville, home to 18 publicly-traded health care companies that have combined revenue of about $73 billion a year and employ more than 500,000 people around the world, according to an economic impact study released by the Nashville Health Care Council in conjunction with the Business and Economic Research Center at Middle Tennessee State University.

Health care is the area’s largest employer, accounting for about 250,000 jobs, or more than a quarter of the Nashville metropolitan area’s non-farm jobs.

Nashville is headquarters to companies from many diverse sectors, including ambulatory services, hospital management, long-term care, behavioral health, academic research and more.

They include established companies like HCA and Community Health Systems, which are two of the nation’s largest hospital operators, and a growing number of startups creating technology for the health care industry.

Nearly 400 health care companies have operations in Nashville and work on a multi-state, national or international basis. Hundreds more professional service firms – consultants, attorneys, etc. – provide consulting to the health care industry, according to Nashville Health Care Council data. The Nashville health care industry contributes about $1.5 billion in state and local taxes.

With health care now accounting for such a big chunk of Nashville’s economy, and about 18 percent of the U.S.’s gross national product, what would happen to all those companies and jobs under single-payer health care?

In many countries, private hospitals and doctors continue operating privately and are reimbursed for their services through a set rate, much like Medicare currently operates in the U.S.

Health care providers might even have an easier time transitioning to dealing with a single payer – the federal government – rather than filing claims with many different insurance companies, which diverts a significant amount of time and resources away from patient care.

The real pain would be felt in the insurance industry, whose main job of processing claims would be taken over by the federal government. The five largest are UnitedHealth Group, Anthem, Aetna, Cigna and Humana, which together have a market value of over $250 billion.

Insurers across the country generally have been unwilling to jump into the debate over single-payer health care. But in March, an executive with BlueCross BlueShield of Western New York wrote an opinion piece in The Buffalo News in response to a city council resolution supporting a single-payer health system in New York.

The proposal “presents an unrealistic view of universal health care, where everyone would be covered, everything would be covered and the system would magically pay for it all,” said Don Ingalls, vice president of state and federal relations for BlueCross BlueShield of Western New York.

Ingalls criticized the bill’s lack of detail and said such a plan would disrupt Medicare coverage for the elderly and disabled, and force those covered by self-insured plans to give up coverage they like while imposing new taxes.

Most importantly, he said, it would do nothing to control hospital and drug costs, other than set prices for medical services that would drive away providers.

Rep. Jim Cooper, who says he signed H.R. 676 “in support of coverage for all,” noted that many technical, administrative and accounting details still need to be worked out.

“It is fair to say” that it would need to be an improved take on Medicare, he adds.

The U.S. now spends more than $3 trillion, or about 18 percent of its gross domestic product, on health care – far more than any other country, yet its health measures are nowhere near the top.

Controlling costs is the Holy Grail of health reform. It’s something no plan has yet managed to do on a large scale, although the Affordable Care Act did fund numerous mechanisms for health care providers to help bend the cost curve by focusing on disease management and preventive care for people with chronic and expensive health conditions.

Part of the problem is the highly fragmented nature of the industry.

“It’s hard to control prices when you have lots of different people negotiating,” says Cameron Kaplan, a professor of health policy, economics and preventive medicine currently at the University of Tennessee Health Science Center.

“You have a lot of different insurers negotiating prices with providers and drug companies, and the providers form networks and the drug companies have patents so they can set the prices.

“On the other side, you have insurers who have some bargaining power but not what you would in a single-payer system,’’ he adds. “The one advantage of having a more concentrated group negotiating prices like you would in single-payer is you would tend to bring health care prices down, which is one of the reasons our health care is a lot more expensive.”

Health care around the world

Most industrialized countries cover all their citizens with medical care, but not all do it the same way.

The single-payer system is just one model of achieving health coverage for all residents (universal coverage), and it means that health care services are reimbursed to providers – doctors, clinics and hospitals – by only one payer, the federal or central government. Most developed nations use a single-payer or hybrid multi-payer model.

Germany has the world’s oldest national health insurance system, introduced by conservatives in the late 1800s to ensure a healthy workforce. It covers its 83 million citizens under a multi-payer hybrid model that provides health, accident and long-term care benefits through insurance plans that are funded by the government.

Most Germans are covered by the compulsory public plan, while about 12 percent opt out and pay for private insurance. Their fees for the public plan are calculated by income: those earning more pay more, with employers covering part of the cost. Private doctors and hospitals deliver the majority of medical services.

The United Kingdom’s National Health Service and Canada’s health program (sometimes called Medicare) are examples of publicly-funded single-payer models.

The National Health Service had its beginnings in the early 1900s as health insurance for industrial workers but launched in 1948 as a single national plan that covers all 65 million residents of the United Kingdom.

Canada’s Medicare covers all 35 million residents of the country and is administered through provincial and territorial health care insurance plans, the largest being Ontario, which includes Toronto, and Quebec, which includes Montreal and Quebec City.

About 75 percent of medical services in Canada are delivered by private providers but reimbursed by public dollars. Canadians pay privately for services that the basic national health plan doesn’t cover, such as dentistry and optometry; many have supplementary private health insurance.

Chuck Frazier, a Toronto business owner who travels frequently to the U.S., says Canadians are mostly satisfied with their single-payer system, but service is lacking.

“From a treatment standpoint, they do the majority of it very well. In terms of general practitioners, cancer, heart problems, et cetera, the treatment standards are fairly similar to the U.S.,” he says.

“But we don’t have the service level that the U.S. has. Your service mentality in the States is second to none.”

Last week, he spent almost three hours at St. Michael’s Hospital in Toronto getting an X-ray – something that would have taken less than half an hour at a U.S. hospital.

“At MD Anderson (a well-known hospital at the University of Texas), the standard is 14 minutes from the parking lot to getting an X-ray to being back in your car,” Frazier points out.

“If I went into St. Mike’s to get an X-ray like I did yesterday and told them that they’d say, ‘You’re on drugs.’

“Here you’re a number, not because they don’t care, but because they don’t have enough staff.”

Still, he explains, Canadians would rather put up with inconvenience than worry about whether they will be covered under a U.S. style of private insurance. People in Canada do not go bankrupt over routine medical procedures.

And he takes exception to critics who claim that Canadians wait in long lines for care. Canadians, he says, are partly to blame.

“A hip replacement, yes, it can be a 12- to 18-month wait. But you could also say, ‘I’ll have it any time of day or night.’

“But we tend to accept it. It’s the British in us; we stand in line.”

Yet the issue of whether a Canadian-style health system could work in the U.S. is something even he wonders.

“We have 35 million people in a small stretch of population centers from coast to coast,” Frazier explains. “You’ve got 330 million people in a lot of large population centers. The scale is totally different. With that many people, it’s like logistics management.”

Medicare: A single-payer model

The United States is alone among developed nations in its multi-payer model in which many different insurers (payers), including for-profit companies like Aetna, Humana and UnitedHealth Group and non-profits like Blue Cross Blue Shield – sell health policies and pay out claims for their members to providers.

Six presidents, including Franklin D. Roosevelt, Harry Truman and William Howard Taft, have tried to enact a national health program covering all citizens. But only Lyndon Johnson succeeded in reaching part of that goal, with the passage of Medicare as an amendment to the Social Security Act of 1965.

Medicare is a single-payer model that covers 55.3 million Americans. That includes 46.3 million who are 65 and older and nine million disabled. It is a sizable and influential part of the U.S. health care system, accounting for $646.2 billion of the $3.2 trillion in total U.S. health care spending.

Dr. Powers, who was in high school in 1965, remembers the furor over Medicare, which was perceived by the American Medical Association as taking control away from doctors.

“Their argument was that if you were a caring health care provider you always provided some free care and forgave bills, but it was a business and you didn’t want government taking over,” Powers recalls.

“The problem was it was unmonitored. I’m sure some physicians forgave bills for services, but there were still people who let their health go because they couldn’t afford to see a doctor.”

More than 50 years later, Medicare has a high satisfaction rate. Americans enrolled in Medicare health plans are consistently the most satisfied with the way the U.S. health system works, according to polls from Gallup and The Commonwealth Fund.

“When people get Medicare, they are, in general, very pleased with their health coverage,” Powers acknowledges.

“In fact, I’ve seen people delay seeking care until they got Medicare – with not very good outcomes sometimes – because they didn’t have coverage until then. It’s a wonderful program, and as a health care professional I’ve been impressed by how well received it is.”

After Medicare was passed, subsequent efforts to expand health coverage to the rest of the population were stymied by misaligned political interests.

In 1974, Richard Nixon, concerned over the rising costs of health care, delivered a remarkably prescient address to Congress in which he proposed a “Comprehensive Health Insurance Plan” consisting of three programs that would “offer to every American the same broad and balanced health protection.” Democratic opposition, and Nixon’s fall from grace, killed the plan before it ever got off the ground.

Bill Clinton’s 1993 health care reform package was opposed by the health insurance and pharmaceutical industries and shot down by conservatives and Republicans.

Not until March 2010, when President Barack Obama passed the Affordable Care Act with only Democratic support, was major insurance reform finally enacted. Few want a return to the old days

Before the ACA, insurers in the United States could refuse to cover people with pre-existing conditions and raise rates based on health status. The ACA prohibited insurers from doing that and imposed many other reforms, including:

-- Allowing young adults to stay on their parents’ policies until age 26

-- Offering states money to expand their Medicaid programs for the poor

-- Establishing state marketplaces on which to purchase individual policies.

Now that Americans have gotten used to these new rights, few want to go back.

“People like their health care, and there’s 20 million more that have it now,” Powers says.

“That gives us hope for single-payer because as more people get government-sponsored or government-related or government-encouraged health care, they like it, and they don’t want it to stop. So, maybe, incrementally, we might get health care for all.”

Even conservative commentator Charles Krauthammer acknowledged that the ACA has shifted the American mindset about health care. In a March 30 column in The National Review, he wrote that the ACA has “normalized” the idea of health care coverage for all.

“A broad national consensus is developing that health care is indeed a right,” Krauthammer said. Two months later, in an appearance on Fox News, he predicted that the U.S. would have single-payer health coverage within seven years.

“The electorate sees health care as not just any commodity, like purchasing a steak or a car,” Krauthammer said. “It’s something now people have a sense the government ought to guarantee.”

Some believe universal coverage has its best chance of political success by moving incrementally, expanding Medicare by moving children and veterans under it, then gradually lowering the age of eligibility.

Others, like Carol Paris, disagree, saying an incremental approach, whether lowering the age or offering a public option to buy into the program, does not capture all the benefits of doing it at one time.

“Making Medicare compete with private insurance doesn’t eliminate private insurance, and that’s where the savings are. If we do public option, we’ll see once again how skilled the insurance industry is at gaming the system.

“They will cherry-pick the healthiest people into private insurance and lemon-drop all the sickest patients into the public option,” she adds. “And then it will be too costly, and everyone will say, ‘See, I told you. A national health program doesn’t work.’

“So, a public option or lowering the Medicare age is not a viable incremental move toward single-payer, and what it’ll actually do is jeopardize it. That has very much been thought through.”

While Powers, who notes that he is 65 and eligible for Medicare, remains steadfast in his work promoting a single payer system, he acknowledges it faces a long upward climb.

To illustrate, he tells a joke.

The joke goes that when Dr. Quentin Young, longtime PNHP president, died and went to heaven, he met with God and said, “I just have to ask you one question about the future.”